Member Info for HarChris

'I'd have more faith if VFRB uptake was the cause of the V spike, but no evidence of that.'

Again that's been explained. The increase in Vrfb installations is absolutely incredible on a percentage basis but the rise from ~100MWh a year to 400MWh from 2021 to 2022 just didn't add up to all that much extra demand, the expected rise to 2000MWh+ this year WILL have an effect, just given a bit more time... and further growth in 2024 will have a huge impact.

The recent numbers from Pangang group are even better than that. It's coming.

Wrong again, the share price hit 15.2p on the 11th March 2022. It was only the selling of 60 million Duferco shares that prevented it going MUCH higher over that period.

You're not as knowledgeable re BMN as you think you are.

Vanadium prices have been falling, let's not pretend otherwise. I make vanadium prices $39.75/kgV in the US, $33.75/kgV in Europe and $34.50 China with an average sales price for BMN at around $36.5/kgV taking in geographies and market mix (not including premium for speciality products). I also make AISC around $33/kgV, maybe lower due to the strength of the dollar against the rand so right now we've seen three very profitable months in 2023 and one month of much smaller profits.

I think there's reason to be confident in the vanadium price bottoming out here and beginning to recover in the coming months but if it doesn't BMN can survive a lot better than other vanadium players around this level, with AISC dropping to closer to $30/kgV by the end of the year. It also helps that they have around 850mtV fully costed inventory to draw on too.

It is quite obvious that there's a healthy working relationship between BMN and Orion and that both parties are happy to see how 2023 plays out before deciding on any restructure - i.e if vanadium prices soar, BMN share price soars and the conversion goes through at 17p, if the inventory is sold off BMN pay in cash, or if short of cash then new terms are agreed.

Oh come on Alfredh, no need to make shi* up just to take advantange of the drop.

Production in 2022 was a record, production in 2023 will definitely be a record. To say operational results are terrible is a damn right lie.

Is the share price related to the predictability of BMN updates? To the lack of shareholder support from management? For their lack of ability to sell the story / enthuse the market? Yes to all three probably but not because of poor operational results.

Q2 2022 total production was 668mtV - this year Vanchem alone could be 400mtV+ (having shared the up-to-date April numbers) which will take production for the month to over 1000mtV. If that's not an improvement i'm not sure what is.

Thanks for recognising my comment, I can't be bothered to compose a similar reply though!

https://twitter.com/RhoRider/status/1653137470266183680

The core software business is struggling and debt obligations are starting to hurt. It's only the recent bitcoin rise that makes the balance sheet look healthier but the fact they are talking about the potential sale of bitcoin down the road has got to be a major threat?

PS your 'i'm here to offer neutrality and balanced debate' mask is slipping ever further.

We'd all be a lot happier if you stuck to attacking BMN on other bbs rather than this.

'whereas F.a.r. would only require debt funding as they were in the much safer belt and road juridstiction of Kazakhstan?'

Who's more likely to get the debt funding they require? Cash generating BMN that would need ~$10-$15m if they haven't quite made enough between Jan and Nov to pay a large debt in full or the company years away from making any money and needing tens, maybe hundreds of millions to get there?

And for FAR if that debt funding isn't forthcoming in this environment what happens to the share price? It implodes... Non revenue, cash burning companies are far riskier right now but it needs more time to play out.

Despite the frustration at the mo there's every chance BMN's market cap is 10X Far's this time next year.

That’s a perfectly acceptable view Steve but it doesn’t address the point Faramog is making. BMN have $300m+ of assets to protect them against any small shortfall with the CLN, the comparator (FAR) may have no debt but they are also about to once again run out of cash and need further funding. If derisking is happening like you’re saying I doubt investors are going to cough up another $20m or so to once again see little progress.

Hence the ‘crazy’ market cap comparison.

I thought I'd do a quick comparison between this recent quarter and the same one last year as on first glance the production numbers aren't amazing but upon a deeper dive they look a lot better.

Q1 production 2023 - 943mtV
Q1 production 2022 - 972mtV

Q1 was the only quarter last year without any significant issues for Bushveld. Load shedding didn't commence until midway through February and only at stage 2, before a week or so at stage 4 in March. Load shedding in Q1 2023 was historically bad, with blackout hours (especially Jan & Feb) not far off the number seen through the entirety of 2022.

This quarter also saw unplanned maintenance at both Vametco and Vanchem. Vametco shut down for one week to replace the secondary crusher whilst also impacted by 10 days of heavy rainfall. Vanchem's shutdown was for two weeks and was seen as an opportune time to deal with feed issues whilst drawing down on the stockpile.

Despite significant disruption compared with the same period the year before the difference in production was just 29mtV. This already has been more than made up for as we were also given the Vanchem production figures for April (up to 24th) which are stark compared to the same period last year:

Vanchem production April 1st to 24th - 117mtV
Vanchem production Q2 2022 - 191mtV

So this year we will see production at Vanchem surpass the previous Q2 from 2022 by latest end of May and probably with half of the quarter to spare. And that's because the agreement with Elamahleni municipality is proving beneficial and significantly reducing operational disruption from load shedding as well as the improved stability and reliability from Kiln 3 beginning to take effect.
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Despite the headline figure it's quite clear that 2023 is going to be another year of record production with lower end guidance more or less guaranteed and higher end guidance fairly likely to be achieved.

Interesting point CS - have very little knowledge in this area but remember reading something relating to this, anti- tax avoidance laws that attempt to prevent this scenario playing out (i.e company A buying out company B with the partial intention of utilising their built up unused tax losses).

It does say used against 'future relevant profits' so maybe a takeover wouldn't apply as it wouldn't be Novacyt making said profits, they would just happen to be part of the wider group?

"At 31 December 2022, the Group has unused tax losses of over £70.9m (covering France & the UK) available for offset against future relevant profits and their period of use is unlimited."

So in other words if they buy profit-making businesses they won't have to pay any corporation tax until they've reached $71m worth of profit above and beyond the tax threshold?

When I looked at Arc's figures previously some it I couldn't understand and some just seemed plain wrong, such as the 40% tax rate they applied but I'll look at the numbers in more detail again tomorrow. It might turn out to be the case that this year ends up with B/E closer to $39 at 17Rand or closer to $36.5/kgV at 18Rand but that reduces considerably by next year as finally the increased scale starts to show through as well as reduced financing costs with the significant debt reduction taking place this year.

Sorry I did gloss over that message, I haven't spent much time looking at the Arc broker report, only the RBC. I was referring to the latter.

The broker report you refer to has expected V prices of $35/kgV and you’re talking $40/kgV and $45/kgV so obviously the predicted profits are low.

I get breakeven at $35.9/kgV at rand17 which includes everything you’ve listed besides, of course, tax which only comes into play if V prices are above the breakeven price.

When projecting ahead we've got to expect the increased operational scale to start showing some cost-benefit. Reaching steady state production of 5100mtV should be possible with only continued sustaining capital similar to this year's $9.5m and inflation should be tempered slightly by the Vametco mini grid so looking ahead next year when forecasting profits it's reasonable to use ~$33/kgV as future breakeven price and closer to $30/kgV if more positive on management's ability to execute successfully.

The profits balloon once you start factoring in Bushveld's near term production and cost-base potential, not to mention the improved margins we should start to see as electrolyte production reaches 100MWh+.

‘$40 or below is only going to be meh profits for 2023. Need V back up to $45kg to net above $20M. ‘

It’s a tad better than that I’d say Ben… as things stand we’re looking at breakeven, net of all costs (cash costs, executive pay, sustaining capital, interest expenses etc ) of ~ $34/kgV as long as the dollar stays at 18 or above through the rest of the year.
So at $40/kgV average sales through 2023 we get $26m profit before tax and at $45m/kgV we get $47m pbt.

Sure the latter is much better but the former is over 40% of the current mcap. Not ‘meh’ whatsoever.

I'm not talking up big profits for this year now until we see V settle and start to rise. For now we know there was significant profits being made in Q1 (~$41/kgV average sales price), but that will have fallen to below $40/kgV now, maybe as low as $38.5/kgV. With the rand so weak however and April's production figures (Vanchem) starting off on the front foot there's every reason to believe that Q2 will be another profitable quarter.

As for Q3 and Q4, well, we'll have to wait and see.

I personally strongly disagree with your own thesis Will on vanadium prices as I don't think we'll see the vanadium market play out as it has in the past - the battery sector decouples the symbiotic relationship in China between production and demand and ensures supply tightness no matter what the steel sector is looking like.

But we shall see.